Real State

How Much Money Should I Leave My Heirs?

Hands putting in to different money jars

How much money is the right amount to leave heirs? The answer depends on a variety of factors. For baby boomers and preceding generations, wealth accumulation has been tied to the transfer of assets to heirs and charities of choice. While leaving money to heirs has often been considered more of a gift than an inheritance, you might be wondering how much is too much to leave your heirs or what the right amount is. Inheritance and estate planning can be an intricate topic to navigate, which is why it’s imperative to have a trustworthy source take you through factors that could influence your decision.

How Much Inheritance Money are Others Giving?

A recent survey that aimed to understand how high-net-worth individuals approached wealth transfer found that the wealthiest Americans will inherit an average of $719, 000. The most common concern that high-net-worth individuals have when it came to the question of inheritance is a worry that the money passed down will be spent irresponsibly, or that the recipients will have difficulty handling an inheritance that is too large. 56% of the individuals surveyed were concerned that a large inheritance would encourage laziness among their offspring.

What to Know about Leaving an Inheritance

Along with the change of times, attitudes towards inheritance are also changing. As the average lifespan has been increasing across all wealth classes, some individuals find that the money they have put aside for their retirement may not be sufficient for maintaining their current lifestyles. Yet others are concerned that leaving too much of an inheritance to their children might spoil them, encouraging a sense of apathy and decreasing their drive. Leaving behind an inheritance could disincentivize heirs from finding jobs, building careers, learning how to live independently, or find work that they are passionate about. 

Families whose wealth has traditionally been passed down through generations may want to carry on said traditions, while entrepreneurs who recently came into wealth might have a different attitude regarding the legacy they pass on to their children. Warren Buffett and Kevin O’Leary are two prime examples of individuals who have chosen not to leave their children a high amount of inheritance. Many of the ultra-wealthy are also choosing to donate the majority of their wealth to important causes, leaving a lasting legacy that benefits greater society.

Making the Choice About Leaving Money to Heirs

Ultimately, the question of how much you should leave your heirs is a highly personal one. The answer depends on your own personal values, the values you wish to inculcate in your heirs, and several other factors. Determining how much you should leave your heirs is a decision that is best made with guidance from your financial advisor and other legal professionals. Here are some of our tips:

  • Don’t be afraid to put your needs first. Be realistic about what it would cost to maintain your current lifestyle upon retirement.
  • Consider other ways you can share your wealth among your heirs – these include paying for their education, purchasing a home, requiring a service mission or business setup, and more.
  • Take a look at the lifestyles of our heirs and think about how the money you are leaving them could be best spent. How can you prepare your heirs to handle their inheritance responsibly?

For additional resources on inheritance and asset protection, we suggest looking into the programs offered by Protect Wealth Academy.  Contact us today to learn more!

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